Wednesday, June 4, 2008

San Fernando Valley Foreclosures heading towards a record

..During April, 608 families lost a home to foreclosure, up from 202 a year earlier and 511 in March..

The glut of homes on the market pushed the price of a median single-family home down to $505,000, a loss of 21 percent, or $125,000, from the year-earlier price, the report said. It was up by $5,000, however, from a month earlier....With notices of default - the first step in the foreclosure process - increasing from 663 in April 2007 to 1,560 a year later, there's no indication the housing slump will end anytime soon, the center said....During April, 964 new and previously owned houses and condos were sold, down 29 percent from a year earlier. It's the lowest sales total for an April since DataQuick began tracking the market in 1988, Blake said.

With 608 foreclosures to 964 sales that means for every 3 homes sold almost 2 were foreclosures were replacing them on the market. This is ignoring newly listed short sales, newly built homes and condos or just an existing homeowner putting their home on the market to sell. It is clear the housing correction will be a long and deep one. The only thing that will reduce the length would be prices dropping to a level that people who don't currently own homes can qualify under todays new tighter lending standards.

But when the SRAR looks at the sales statistics for April here is what they say:

"But multiple factors argue against steep declines in single-family home prices:” Link said, “pent-up demand, an inventory that offers a good selection yet is not excessive, assistance for some beleaguered home owners that will keep more homes off the market.."

“Anyone interested in buying a home who is waiting for prices to fall off a cliff most likely will miss what may well be a small window of opportunity to get into the market,” Link said.

Trust is needed for buyers to come into the market. Trust that they aren't being sold a line in order to make a sale and are getting the straight scoop on the market. These comments are not building trust. Hopefully the SRAR will learn to craft their message to reflect the market accurately and let people know that when they decide to buy or sell they know who to call. Tomorrow the Mortgage Bankers Association reports national delinquency numbers we should be in for a new record.